With our powerful pedigree in strategy, prospective clients sometimes ask why we at DBG continue to offer design and development as a service line. Besides the fact that doing so allows us to meet our aspirations of being a full service agency, fostering a design-centric approach truly facilitates our primary mission of delivering integrated, results-based strategy and innovation on behalf of our clients and the customers that they serve.

That being said, we were very pleased to see that the Harvard Business Review dedicated its September 2015 issue to the topic of design thinking and its impact on devising business strategies. Adi Ignatius opens the conversation with the following “Design as Strategy” summary:

Design thinking isn’t new, but many companies still aren’t sure how it can improve their business. This month’s Spotlight illustrates some of the ways design thinking is starting to power corporate strategy.

Design Thinking in the C-Suite

If design is really about deeply understanding people and then strategizing around that, we need design leaders with broad skills. Corporate executives often don’t understand that there are different kinds of design: There is brand design. There is industrial design. There is UX and experience design. And there is innovation in strategy. So, you need a leader who can manage all the different phases of design in a very smart way—someone with a holistic vision.

– Mauro Porcini, PepsiCo Chief Design Officer

The emphasis on design clearly is moving to the C-suite, and more and more organizations are creating a chief design officer role. A notable example is PepsiCo, which poached Mauro Porcini from 3M to inject design thinking into nearly every aspect of the business.

Sustainable competitive advantage is fleeting. The cycles are shortened. The rule used to be that you’d reinvent yourself once every 7 to 10 years. Now it’s every 2 to 3 years. There’s constant reinvention: how you do business, how you deal with the customer.

– Indra Nooyi, PepsiCo CEO

Design-Centric Organizational Cultures

How should companies think about design centricity? For Jon Kolko, vice president of design at Blackboard, design thinking can define the way an organization functions at the most basic levels—how it relates to users, how it prototypes products, how it assesses risk. In “Design Thinking Comes of Age,” Kolko says that companies today must contend with unprecedented technological and business complexity and that design can help simplify and humanize complex systems.

The pursuit of design isn’t limited to large brand-name corporations like IBM or GE; the big strategy-consulting firms are also gearing up for this new world, often by acquiring leading providers of design services. In the past few years, Deloitte acquired Doblin, Accenture acquired Fjord, and McKinsey acquired Lunar. Olof Schybergson, the founder of Fjord, views design thinking’s empathetic stance as fundamental to business success.

A design-centric culture transcends design as a role, imparting a set of principles to all people who help bring ideas to life. Let’s consider those principles:

Focus on users’ experiences, especially their emotional ones – to build empathy with users, a design-centric organization empowers employees to observe behavior and draw conclusions about what people want and need.

Create models to examine complex problems – leveraging customer journey maps and other design models to explore and present alternative, non-linear ways of looking at and overcoming a problem.

Use prototypes to explore potential solutions – design-centric companies aren’t shy about tinkering with ideas in a public forum and tend to iterate quickly on prototypes—an activity that the innovation expert Michael Schrage refers to as “serious play.”

Tolerate failure – a design culture is nurturing. It doesn’t encourage failure, but the iterative nature of the design process recognizes that it’s rare to get things right the first time. Apple leverages failure as learning, viewing it as part of the cost of innovation.

Design Leading to Business Innovation

That said, design-led strategy isn’t easy, as Tim Brown, CEO of IDEO, and Roger Martin, former dean of the Rotman School of Management, point out in “Design for Action.” They describe how complex innovations often encounter stiff resistance from intended beneficiaries and those delivering the new product or service, because they jarringly disrupt existing behaviors and business models.

The solution, the authors propose, is to treat the launch of a disrupter as a design challenge in itself—a process they call intervention design. What’s the ultimate place for design in an organization? Nooyi sums it up like this: “Design leads to innovation and innovation demands design.”

Consider this example: A couple of years ago, MassMutual was trying to find innovative ways to persuade people younger than 40 to buy life insurance—a notoriously hard sell. The standard approach would have been to design a special life insurance product and market it in the conventional way, but MassMutual concluded that this was unlikely to work. Instead the company worked with IDEO to design a completely new type of customer experience focused more broadly on educating people about long-term financial planning.

Launched in October 2014, “Society of Grownups” was conceived as a “master’s program for adulthood.” Rather than delivering it purely as an online course, the company made it a multichannel experience, with state-of-the-art digital budgeting and financial-planning tools, offices with classrooms and a library customers could visit, and a curriculum that included everything from investing in a 401(k) to buying good-value wine.

That approach was hugely disruptive to the organization’s norms and processes, as it required not only a new brand and new digital tools but also new ways of working. In fact, every aspect of the organization had to be redesigned for the new service, which is intended to evolve as participants provide MassMutual with fresh insights into their needs.

Wrap-Up

Innovation, by its very definition, represents new ideas, methods, products and processes brought about through change, revolution and transformation. Design, as an act or a representational outcome, is the purest form of innovation facilitation.

Taking design principles from the drawing board to the boardroom is not an easy transition, but it is necessary if an organization is to be successful in transforming innovation into sustainable competitive advantage. Having delivered such outcomes on behalf of clients across diverse industries such as travel, telecommunications, apparel and entertainment, we can attest to the importance of a top-down embracing of design thinking.

Ready to learn more and experience truly transformative growth, contact us for a complimentary consultation.